K. Ramaswamy, J.
1. The petitioners is seeking to issue a writ of mandamus to direct the respondents to refund Rs. 96,331- 47Ps., claiming that it was an illegal collection. THe petitioneris a manufacture ofplywoodand allied products including flush doors. Their products were assesseed to excise duty. Flush doors were taxed under Item 16-B of Schedule I of the Central Excises and Salt Act(1 to 1944), for short, 'the Act' at 24%+5% on basic excise duty as special excise duty. The petitioner paid the same without any demur for the period from January 18, 1978 to October 27, 1980. Messrs Woodcrafts Products, Delhi, when questioned the levy under the said Tariff Item 16-B, the Delhi High Court by judgment dated March 17, 1980 held that the goods were exigible to tax under resduary Item No. 68, ranging from 5% to 8%. It was confirmed by the Supreme Court on refusing special leave. The first respondent, in excise of the power conferred under Rule 8(1) of the Central Excise Rules, 1944, for short, 'the Rules', issued the Notification No. 162/81 -C.E., dated September 11, 1981, deleting the words 'including flush doors' from Item 16-B. It was publshed in the Gazette and the Collector, Central Excise, Guntur communicated on Otcober 2, 1981, to all concerned. THe petitioner in the meanwhile, byhis application dated May 11, 1981 requested the Assistant Collector, Central Excise, fourth respondent to refund the difference of the duty. Thereon the fourth respondent issued a notice dated September 16, 1981, to show cause why the refund claim should not be rejected. Pursuant thereto, the petitioner submitted the explanation on October 29, 1981 and requested for personal hearing which was given. After consideration on merits, the forth respondentheld that Section 11-B of the Act which came into force from November 14, 1980 prescribed a period of six months from the date of payment of duty and the claim is barred by limitation under sub- section (1) of Section 11-B of the Act. Accordingly, the claim for refund was rejected. It was confirmed by the Appeallate Collector (Respondent No. 3) by order dated September 22, 1982 and also by the Appellate Tribunal, Southern Region (Respondent No.2) by order dated October 1983. Hence the writ petition.
2. Sri. K. Srinivasan Murthy, learned counsel for thepetitioner hascontended that under Article 265 of the Constitution, the authority has no power to levy or collect the excise duty under Item NO. 16-B on flush doors as held by the Delhi High Court resulting delection of the item from the Statute. Therefore, it is a mutual mistake of law by the petitioner and the 4th respondent. Under SEction 72 of the Contract Act, the petitioners is entitled to refund. THough under Section 11-B the authorities are bound by the statutory prescription of six months and were justified to reject the claim, the jurisdiction of this Court under Article 226 of the Constitution is still available to claim for refund. THe restriction imposed by the Act does not stand in the way of this Court to grant the relief. THe claim for refund is within three years though barred under the Act and this Court may issue a mandamus directing the authorities to refund the excess collection of excise duty. In support of this contention, he relied on Sri Vallabh Glass Works v. Union of India-1984(16) E.L.T. 171 (S.C.), Kesoram Cement v. Union of India-1982 E.L.T. 214 (A.P.) and D. Gawasji and Co. v. State of Mysore- : 1978(2)ELT154(SC) . Despite the amendment and Section 11-B of the Act, a Division Bench of the Bombay High Court in Leukoplast (India) Lted. v. Union of India-1983 E.L.T. 2106 (Bom.) directed refund when the claim si within three years. He banked heavily on it. It is further contended that when the goods are not exigible to duty under Item 16-B but was paid by mistake of law, the limitation prescribed under Section 11-B has no application and therefore the Court can grant the relief under Article 226 of the Constitution. In support thereof, he releid on the decision reported in Vazir Sultan Tobbaco Co.Ltd. v. Union of India-1981 E.L.T. 140(Del); Canara Rubber Product Pvt Ltd. v. Assistant Collector of Central Excise-1983 E.L.T. 97 (Kar.) and Golden Tobacco Company Ltd. v. Union of India-1983 E.L.T. 2238 (Bom.). He also placed before the Court serise of orders passed by the Supreme Court and by this Court where refund was ordered.
3. Sri Jagannadha Rao, learned senior standing counsel for the Central Government has fairly conceded that though the jurisdication of the Courts was ousted by operation of sub-section (5) of Section 11-B of the ACt, it has no effect on the exercise of jurisdiction under Article 226 and in appropriate cases, writs or orders could be issued. But in this case, that jurisdiction cannot be exericised for the reason that the petitioner had already invokd the jurisdiction of the authorities. The authorities are not bound to grant the relief under Section 11-B if the claim for refund is made after six months from the duty. Admittedly, the claim was made beyond six months.Therefore, the authorities have rightly rejected the claim for refund. In support thereof, he relied on Burmah COnstruction Co. v. State of Orissa- : AIR1962SC1320 and Incheck Tyres Ltd. v. Assistant Collector-1979 E.L.T. 236 (Cal). He further contended that the Amendment was made by the Legislature with a view to prevent the manufacture or producer to have unjust enrichment on refund of the amount. While excrcise the jurisdiction under Article 226 that principle hasto be kept in view. He distinguished the decisions relied upon by the learned counsel for the petitioners on the ground that earlier to the amendment, the Supreme Court and the High Courts granted refund when the claim was within three years. Now the Legislature has amended and introduced Section 11-B prescribing the limitation as six months to claim refund. Therefore the decision of the Supreme Court in Vallabh Grass works case (supra) has no application to the facts of this case. With regard to Lekoplast case (supra) he contended that the Division Bench has not laid down the law correctly. THrefore, it does not furnish a valuable assistance. He did not cite any other authorities, on these aspects.
4. Sri. Srinivasa Musrthy, in reply, contended that the principle laid down in Burmah Construction Co. v. State of Orissa (supra) has no application to the facts in this case. That was a case where the appellant sought a writ of mandaamus for the enforcement of the provisions under the Orissa Sales Tax Act, one of which is the period of limitation. Therefore, the Supreme Court upheld the contention of the State. The principle laid down therein has no application to the facts in this case since the petitioner is not seeking enforcement of the claim under Secion 11-B of the Act. He also sought to distinguish the decision of the Calcutta High Court stating that the subsequent Bench judgments of the Calcutta High Court and all other High Courts did not support the view of the learned Single Judge of the Calcutta High Court. He reiterated his contention in the opening arguments.
5. Upon the respective contentions, the main question that arises for consideration is whether writ of mandamus could be issued compelling respondent NO. 4 to refund the difference of duty of excise collected under Tariff NO. 16-B on plywoods? The facts are not in dispute and therefore they need not be reiterated. The petitioner paid duty of excise on plywood, under Tariff No. 16-B at the specified rates. It is now accepted that plywood is exigible to duty under residuary Item No. 68. As a result the plywood was deleted from Item No. 16-B. The petitioner claimed refund of the difference. The quantum of amount claimed is not disputed. He bacame aware olnly after the decision rendered by the Delhi High Court i.e.March 17, 1980. It is mutual mistake of law. THis is the premise on which the refund is claimed. The assessment orders have not been challenged and they were allowed to become final. Preceding Section 11-B of the Act, Rule 11 of the Rules was operating the cliaim for refund and the limiation prescribed thereunder it three months from the date of payment of excise duty or adjustment as the case may be. It was held that the said limitation applies only to the authorities under the Act and the High Court is not bound by it. (Vide Associated Bearing Co. Ltd. v. Union of India- 1980 E.L.T. 415 (Bom.)(D.B.).
6. It is well settled that Rule cannot control the operation of the main provision in the Act. Stream can rise no higher than the source. Therefore, the Customs, Central Excise and Salt and Central Boards of Revenue Amendment Act 25 of 1978 was made by the Parliament. It received the assent of the President on 6-6-1968. The Act was published in the Gazette of India on June 7, 1978. IT has come into force with effefct from November 17, 1980, vide Notification No. 182/80-C.E., dated November 15, 1980. Section 21 of the Amendment Act introduces Section 11-A, 11-B and 11-C underthe Act. Section 11-A empowers the State to recover the dues not levied or not paid, or short levied or short paid or erroneously refunded in an extended period of five years for levy duty of excise after giving an opportunity to the assessee. Equaly Section 11-B gives right to the assessee to claim refund giving power to the Assistant Collector, Central Excise to grant. THe material part therof, relevant to discussion, reads thus;
'11-B. Claim for refund of duty-(1) Any person claiming refund of any duty of excise may make an application for refund of such to the Assistant Collector of Central Excise before the expiry of six months from the date of payment of duty;
Provided that the limitation of six months shall not apply where any duty has been paid under protest.
(2) * * * *
(3) * * * *
(4) Save as otherwise provided by or under this Act, no claim for refund of any duty of excise shall be entertained.
(5) Notwithstanding anything contained in any other law, the provisions of this section shall also apply to a claim for refund of any amount collected as duty of excise made on the ground that the goods in respect of which such amount was collected were not excisable or were entitled to exemption from duty and no court shall have any jurisdiction in respect of such claim.'
(Sub-section (2) and (3) and the proviso are not relevant, hence omitted)
A reading of these provision would show that :
(1) A right to claim for refund was giving to the assessee;
(2) Any person claiming refund may make an application to the Assistant Collector of Central Excise for the refund of any duty of excise.
(3) That application shall be made before the expiry of six month from the date of payment of duty.
(4) The six months limitation does not apply, when payment was made on protest.
(5) No claim for refund shall be made save as otherwise provided by or under the Act. In other words, the right to claim refund shall be only in accordance with the provisions of the Act, including Section 11-B.
(6) Notwithstanding anything contained in any other law, obviously including Contract Act and Limitation Act, 1963, Section 11-B shall also apply to a claim based on the ground that the goods in respect of which the excise duty was collected were not either exigible to duty or were entitled to exemption. In other words, the provisions of Contract Act and Limitation Act, 1963 stood excluded. Despite the non- exigibility of the goods to duty or their exemptability, yet when such goods were assessed to duty and levy was collected, the claim for refund of the duty in respect of such, goods also shall be made only under Section 11-B. The adverb 'also' manifested the Legislative intent meaningful in clear and enequivocal terms i.e., in respect of exigible as well as non-exigible goods the claim for refund shall be made only under Section 11-B.
(7) In respect of all the claims the jurisdiction of any Court is expressly outsed. Thereby the Legislature appears to have intended that Section 11-B is a complete Code in itself. A reading of Section 11-A and 11-B shows that for the claims of the State five years period was prescribed and for the assessee limited to six months.
7. It is not disputed that exclusion of the jurisdiction of any Court for the purpose of Section 11-B does not apply to the jurisdictiojn under Article 226 of the Constitution. It is now well settled that no legislature can place any fetters inhibiting or whittling down the power conferred under Article 226 of the Constitution or take away by any Act of legislation. (If any authority is needed, refer to the latest one being Union of India v. A.V. Narasimhalu- : 1983(13)ELT1534(SC) .
8. The contention of Sri Srinivasa Murthy, that despite the existence of sub-section (1) and (5) of Section 11-B the High Court still has power to issue mandamus directing the authirity to grant refund and his threat hurled that people (perhaps manufacturers and producers) lose faith in the Courts if refund is not ordered, found plausible in the first blush and attempted to swin along the unabated stream of authorities cited anc came across during further investigation. But when we reached Nagiarijuna Sagar Dam erected diverting flow through Section 11-B of the Act into the reservoir (exchequer) to replenish for public purpose, we fell into deep trouble. So we stopped and heaved deep breath to look around diverse fruitful perspectives before attempting to percolate, if possible, or cross-over the Dam otherwise. Therefore, let us broach the neighbourhood fields of utility to take aid of to arrive at a just decision.
9. Pre-existing law : In Sales Tax Offices v. Kanhiayalal- : 1SCR1350 , their Lordships of the Supreme Court, speaking through N.H. Bhagwati, J. held that once it is established that the payment of tax was made under mistake of law, the party is entitled to recover the same under Section 72 of the Contract Act. It was further held that:
'...... merely because the State had not retained monies paid by the respondent but had spent them away in the ordinary course of the business of the State would not make any difference to the position and under plain terms of Section 72 of the Contract Act, the respondent would be entitled to recover back the monies paid by it to the State of U.P. Under mistake of law.'
Tax is intended for immediate expenditure for the common goods and it would be unjust to require its payment after it has been in whole or in part expended, which would often be the case, if the suit or application could be brought at any time within three years of a court declaring the law under which it was paid to be invalid, be it a hundred years after the date of payment. Nor is there any provision under which the Court could deny rfund of tax even if theperson who paid it has collected it from his customers and has no subsisting liability or intention to refund it to them or, for any person, it is ijpracticable to do so is law laid down through Mathew, J. in D. Cawasji and Co. v. State of Mysore (supra). In State of Madhya Pradesh v. BHaila Bhai - : 6SCR261 Das, Gupta, J. speaking for the unanimous court held that Article 226 empowers to give relief by way of enforcement of fundamental right and other statutory rights by issuing appropriate writs to give consequential relief by ordering payments of money realised by the Government without authority of law. Uner Article 265 of the Constitution, the State has no power to levy or collect tax except by authority of law. It was further held that the Limitation Act does not apply to the granting of relief under Article 226. The time fixed by the Ligislature may ordinarily be taken to be a reasonable standard (vide para 21). In D. Cawasji case (supra) Mathew, J. held that where a suit lies to recover money paid under mistake of law, a writ petition for refund tax within the period of limitation i.e., within three years of the knowledge of the mistake would also lie. For filing a writ petition to recover the money paid under mistake of law, the Court has to see that the starting point of limitation is from the date on which the judgment declaring as void the particular law under which the tax was rendered as that would normally be the date on which the mistake becomes known to the party.
10. In Trilokchand Motichand v. H. B. Munshi : 2SCR824 the question of applicability of limitation prescribed under the Limitation Act was considered by a Constitution Bench and their Lordships of the Supreme Court in separate judgments-Hidayatullah, C.J. Sikri, J.(as he then was), Bachawat and MItter , JJ. , except Hegde, J. have held that the principles laid down under the Limitation Act would apply for the enforcement of the right to refund of payment made under mistake of law covered by Section 72 of the Contract Act even when it is enforced under Article 32 of the Constitution. Hegde, J. held that the period of limitation would not stand in the way of the Supreme Court to grant the relief under Article 32 of the Constitution. Bachawat, J. pointedly held thus :
'....... no period of limitation is prescribed for such a petitioners (under Article 32).... Technical Rules applicable to suits like Section 80 C.P.C. are not applicble to a proceedings under Article 32. But this does not mean that in giving relief under Article, 32, the Court must ignore and trample underfoot all laws of procedure, evidence, limitation etc. The extraordinary remedies under the Constitution are not intended to enable to claimant to recover monies, the recovery of which by suit is barred by limitation. Where the remedy in a writ application under Article 32 or 226 correspond to a remedy in an ordinary suit, and the latter remedy is subject to the bar of a statute of limitation, the Court in its writ jurisdication by analogy to the statute adopts the statutes as its own rule of procedure and in the absence of special circumstance imposes the same limitation on the summary remedy in the writ jurisdiction....... Likewise, the High Court acts on the analogy of statute of limitation in a proceeding under Article 226 though the statute does not expressly apply to the proceedings. (vide para 37).
11. In Sri Vallabh Glass Works case (supra)for the refund of difference of duty of excise, the authorities have rejected the claim and the writ petition was filed. In that context, their Lordships of the Supreme Court, speaking through Venkataramanaiah, J. had considered the effect of Section 72 of the Contract ACt, Section 17(1)(c) and Article 113 of the Limitation ACt, 1963 and held :
'It is not disputed that the HIgh Court have power, for the purpose of enforcement of fundamental rights and statutory rights, to make consequential orders for repayment of money realised by Government without the authority of law under Article 226 of the Constitution. This is an alternative remedy provided by teh Constitution in addition to but not in superssion of the ordinary remedyby way of suit in the absence of any provision which would bar such a suit either expressly or by necessary implication. While there are different periods of limitation prescribed for the institution of different kinds of suits by the Limitation Act, 1963, there is no such period prescribed by law in respect of petitions filed under Article 226 of the Constitution.'
The relief of refund from the date of filing of the writ petition was granted. Therein the amendment did not come up for consideration.
12. Thus, it is now well settled that the State cannot place any fetters or inhibitions or impediments for an aggrieved person to approach the Court under Article 226 of the Constitution. The power given under Article 226 is of wide amplitude, of course, subject to territorial limits and its arms are long enough to reach injustice wherever it is found. The technical rules of the producer like limitation though has no application in its direct sense, the prescription of limitation for suit provided under the Limitation Act, 1963 has been adopted as sound priciple as analogy to grant relief under Article 226. The extent and manner of interference is for the Court to decide depending on the facts and circumstance of each case. THe court has also to keep in view the law made by a compenent legislature as untimalty it is the rule of law that has to prevail. When the claim lais is within three years the refund is ordered by issue of a writ of mandamus though tends to have unjust enrichment.
13. Scope of Amendment : As seen, through Section 11-B the Legislature brought i certain structural changes. THe jurisdiction of the Courts have been excluded; threby given finality to the orders passed by the compent authority thereunder. Non-abstendi clause has been introduced excluding the applicability of any other law including the Contract Act and the Limitation Act, giving primacy to the provisions contained in Section 11-B. The procedure prescribed under the Act alone is to be invoked. Even the good in respect of which the amount of excise duty levied and collected, though was not in fact excisable to tax or were entitled to exemption, the power to grant refund the duty of excise is to be made within six months from the date of payment of such duty. Therefore, the first qauestion is what is the object of the Statute in prescribing the limitation and conferement of exclusive jurisdiction on the Assistant Collector of Excise? It may be made clear at this juncture that the constitutional validity of sub-section (1), (4) and (5) of Section 11-B have not been rightly assailed in this case. There is presumption that the law made bythe competnet Legislature is constitutionally valid. The only question is what is the effect of theamendment made. It is the contention of Mr. Srinivasa Murthy that the rigour would be applicable to the authorities acting under the ACt and it has no effect on the exercise of the power by this Court under Article 226 of the Constitution. Therefore, despite the limitation prescribed under sub- section (1) of Section 11-B, this court could grant the relief of refund when it is within three years. We proceed that Section 11-B is constitutionlly valid. Threfore, the question is what is the effect of Section 11-B? Whether this Court in exercise of the power under Article 226 could ignore the statutory intendment Whether still exercise the power under Article 226 relying upon the limitation of three years precribed under the general law of the Limitation Act, though barred under Section 11-B of the ACt? Whether such exercise of power would not frustarate the object of the Amendment Act and render it surplusage ?Would it be feasible for this Court to trample the law under its foot or power to grant relief of refund untramelled by the legislative unimation aroused by Section 11-B are some of the important questions which pose for consideration. As stated earlier, Mr. Srinigvasa Murthy banlked heavily upon the Division Bench decision of the Bombay High Court in Leukoplast case (supra).
14. Procedural Rights : No person has a vested right in a particular remedy for enforcement of a right. Equally, no person has a vested riht in any particular forum. Procedure could be altered by a competent Legislature with retrospective effect unless there is some goods reason against it. (Vide New India INsurance Co. v. Shanti Misra : 2SCR266 ). THe real test is whethre the law in qustion affects or impair existing rights including the right of action. The statute of limitation being a law of procedure is, as a rule, retrospective in its operation and govern all proceeding from the date the Act has come into force. Exception are envisaged but is rendundant here to particularise. The statute of limitation assumes the existence of a cause of action and does not define it or creats one (VIde R.C. Jall v. Union of India AIR 1962 S.C. 128 at 1284) Mitra, in his Tagore Law Lectures, 1932 6th Edition, Volume I, at page 256 has stated that a law of limitation and prescription may appear to operate harshly or unjustly in partcular cases, but where such law has been adopted by the statute,...... it must ,if unambiguous, be applied with stringency. The rule must be enforced even at the risk of hardship to a particular party. The Judge cannot on equitable grounds enlargee the time allowed by law, postpone it operation or introduce exception nor recoginsed by it. This statement of law received approval of their Lordship of the Judicial Committee of the Privy Counsel in General Accidents, Fire and Life Assurance Corpn. Ltd v. Janmahomed Abdul Rahim-AIR 1941 P.C. 6 and Viscount, Mangham held :
'Limitation Act ought to receive such a construction as the language is its plain meaning imports.'
The same is the view in P. D. Jambhekar v. State of Gujarat : 1973CriLJ308 and it was held therein that in interpreting the provisions of the statute prescribing limitation for institution of a proceding, qauestion of equity and hardship are out of the place.
15. THe question at this stge is whether sub-section (1) os Section 11-B is a special Law
Section 29(2) of the Limitation Act, 1963 postulates thus :
'29. (2) Whether any special or local law prescribes for any suit, appeal or application, a period of limitation different from the period prescribed by the Schedule, the provisions of Section 3 shall apply as if such period were the period prescribed by the Schedule and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by ant special or local law, the provision contained in Section 4 to 24 inclusive, shall apply only in so far as, and to the extent which, they are not only expressly excluded by such special or local law.'
Thereby Section 29(2) of the Limitation Act excludes the application of the period of limitation provided in the schedule to a law provided by a special or local law. The question is whether Section 11-B is a special law
16. In Kaushalya Rani v. Gopal Singh : 4SCR982 the question arose was whether limitation provided under Section 417(4) of the Code of Criminal Procedure, is a special law within the meaning of Section 29(2) of the Limitation Act, 1908. Their Lordships considered this question and Sinha, C.J. speaking for the Court held in paragraph 7 thus;
'A `special law' therefore, means a law enacted for special case in special circumstances, contra-distinction to the general rules of the law laid down, as applicable generally to all cases with which the general law delas. In that sense, the Code is a general law regulating the procedure for the trial of criminal cases, generally; but if it lays down any bar of time in respect of special cases in special circumstancs like those contemplated by Section 417(3) and 417(4) read together. it will be special law contained within the general law. As the Limitation Act has not defined`special law', it is neither necessary nor expendient to attempt a definition. Thus, the Limitation Act is a general law laying down the general rules of limitation applicable to all cases dealt with by the Act, but there may be instance of a special law of limitation laid down in other statutes though not dealing generally with the law of limitation.......
Once it is held that the special rule of limitation laid down in sub- section (4) of Section 417 of the Code is a `special law' of limitation governing appeals by private prosecutors, there is no difficult in coming to the conclusion that Section 5 of the Limitation Act is wholly out of the way, in view of Section 29(2) of the Limitation ACt. As pointed out earlier, under Section 29(2) of 1908 Act, Section 5 was expressly excluded.'
17. Similar question was considered by one of us(K. Ramaswamy, J.) in M.Prabhudas v. Abdul Kareem-1984-I.A.P.L.J 361. The question therein was whether the limitation prescribed under Rule 23(1) of the Andhra Pradesh Buildings (Lease, Rent and Eviction Control) Rules, is a local law. It is held therein that Rule is a local law within the meaning of Section 29(2) of the Limitation Act, and the Limitation Act to the extent prescribed stood excluded.
18. As soon earlier, sub-section (5) of Section 11-B employs non- abstendi clause thereby excluding the applicability of limitation prescribed under the general law of Limitation Act, 1963 and it prescribes its own limitation for the purpose of the provisions under the Act. Sub-section (1) of Section 11-B a period of six months and sub-section (4) provides that a claim for refund shall be entertained under the Act alone. Thereby applying the ratio laid down by their Lordships of the Supreme Court in Kausalya Rani case(supra) and Prabhunds case (supra) , it must be held that Section 11-B (1) is a `special law' for the purpose of the ACt. On equitable grounds the Court cannot either enlarge or postpone its operation nor introduce exceptions.
18A. Incidence of Excise duty : A duty of excise is primarily a duty levied on a manufacturer or producer in respect of the commodity manufacuted or produced as held by Lord Simond in Governor General in Council v. Provinice of Madras-AIR 1945 P.C. 98, It is an indirect tax which the manufacturer or producer passes on to the ultimate consumer i.e., its altimate incidence will always be on the consumer, as held by Subbha Rao, J.(as he then was) speaking for the Court in R.C. Jall case (supra). Thereby the burden of incidence of tax is thus passed on by the manufacuture or producer to the consumer. He did not bear any burdon of the tax. By ordering refund, the benefit of refund of excise duty must normally go to the consumer but not the intermediary manufacture or producer. It is common knowledge that in the case of collection of indirect tax when it is found to be unconstitutional and refund is ordered, invariably the consumer would remain unidentified or even if it is possible to identify, his chance to get back the refunded amount is a remote one since by then the consumer may not preserve the evidence of purchase made from the producer or manufacture to whom the refund is ordered. As a result, the producer or manufacturer retains the benefit and get the windfall of money refunded for which he has no legal right, title or interest and thereby he gets an unjust enrichment.
19. The need to make amendment : It is now well settled by catena of decisions of their Lordships of the Supreme Court starting from Kanhaiyalal case (supra) that when the tax collected was found to be anauthorised, it is the duty of the State though already expended, to return to the producer or manufacture when it is established that it is by mistake of law, under Section 72 of the Contract Act. In Cawasji case (supra) it was held that;
'..... Nor is there any provision under which the Court could deny refund of tax even if the person who paid it has collected it from his customers and has no subsisting liability or in intention to refund it to them, or, for, any reason it is impracticable to do so.'
Corts have chided the State when resisted the claim for refund (Vide Golden Tobacco Ltd . v. Union -1983 E.L.T. 2238 (Bom) Madon, J.(as he then was).
20. THe Role of the State under the Constitution : It is equally relevant to keep in view that the Constitution envisioned an egalitarian Socialist State assuring to every citizen justice-social, economic and political. Majority of the pepole are far below the poverty line and fundamental rights are teasing illusions to them. The challange of social justice for them is the challenge for equal opportunity not in form but in substance and the challenge of social justice, a constitutional mandate has to be accepted and on the basis of day to day experience and the performance of law, articulate diverse provisions of the Constitution while meeting the challenging situation in the society. THe State has a positive role to play to usher in an egalitarian state. In Kurra Subbaro v.District Collector, Guntur-W.P. No. 5856/84, dated 10-8-1984=1984-2 A.P.L.J. 15 (S.N.) one of us (K. Ramaswamy, J.)considered the role of the State in the context of providing house sites to the poor and held thus :
'In a dempcratic society without some property or capicity to acquire 'the property in wide sence' there is no scope for dignity of person or to develop character, personality, etc. They (poor)cannot stand up to theri constitutional rights. The thrust of the Constitution is the establishment of an egalitarian socialist State. Majority people are below poverty line. State is to provide facilities and opportunities to them so as to eliminate inequality of statues. Social justice is a fundamental right to them. The State being a welfare State, adhered to render social justice : it exists and its only title to exist is to advance their public goods in tune with Arts. 46 and 38 of the Constitution to secure justice, social, economic and political for example fundamental right to permanent residence so as to transcend all sections of the society to lead good life fostering 'dignity of individual under a legal order' leading to unity and integrity of the nation.'
21. The need for funds : In B. Tripurasundaramma v. State of A.P.1984-1 A.P.L.J. 55 one of us (K. Ramaswamy, J.) considered the need of the State for funds in the context of its priority of crown debts over unsecured creditior, and while upholding the priority held :
'In a Democratic Socialist Republic, State must have the primacy for its debts when it is harged with the duty to transform the Socialist Republic into a reality withihn the constitutional framework and to meet frequent devastation done due to natural calamities, etc. THe State must therefore be in possession of enough funds THis consideration and wisdom necesitated to concede to the State priority to its debt. The founding fathers of the Constitution directed the state to unravel the economic inequalities amoung its people assuring in Part III equality and justice, social and economic, etc. and to bring them to fruition taking aid of the dynamic dirve of the directives pregnant with humanisum set out in Part IV of the Constitution. To make those rights meaningful to the people of lower strata and directives a reality, Constitution charged the State with the duty to implement them. Welfare oriented are the only means t that end. The Court is to take judicial notice thereof and adopt goal oriented approach, when called upon to consider the prerogative of State's debt. Judiciary has ka crucial role to paly in the promotion of socio-economic transformation of the State by evinching activism, of course, always upholding the Rule of law.'
It was also held :
'It is a stupendous task to make the ideals enshirned in Part IV a reality. THe State requires adequate revenue to undertake ameliorative measures. Therefore with a view to feed the exchequer with adquate fundes, the Legislature undertook several fiscal legislation to secure the required funds and made the persons liable for payment thereof.'
22. In State of Kerala v. Alluminium Industries Ltd. -1965 (16) S.T.C. 689(S.C.) a larger Bench of the Supreme Court consisting of seven Judges speaking through Wanchoo, J. (as he then was) held thus :
'Where tax is levied by mistake of law, it is ordinarily the duty of the State, subject to any provisions in law realating to Sale-s-tax (and no such provisions is brought to our notice) to refund the tax. It refund is not made remedy through Court is open subject to the same and also to the period of limitation i.e., three years from the date when the mistake becomes known to the person who made the payment by mistake.'
23. The right to property being a fundamental right under Art. 19(1)(f) had its primacy and the Courts ariticulated it to its full sway. In that arena, on finding the collection of tax without authority of law, regardless of unjust enrichment to the manufacturer, producer or trader and its effect on the society, the Courts insisted to refund the same to them. Being an indirect tax, they had already passed on its incidence to the consumer. The possibility of restitution to the payer is a remote onw. The plethora reported and countless unreported decisions establish that the refund is 'a matter of routine' and a windfall to the intermediary and escalate the gulf of inequality of income amongst individuals vary widely. The faith of the people is the savious and succcour for the sustenance of rule of law. Any weakening of that link will rip apart the edifice of justice. The endeavour has to be to meet that just expectation of those who repose their faith in Courts, not merely the swindlers and contrageners who frequently resort to writ proceedings for gain or to escape law and often times stezal a march over old cases that patiently await adjudication for early hearing. THis case is an instance. THe writ petition was filed on 21-2-1984 and was taken up for hearing on 7-8-1984. The paryers of tax are getting disillusioned in their faith in Courts being helpless spectators, to see that the intermediary are securing unjust enrichment at their expense, though the latter bear no burden nor had any righer or title to it. Section 2 of the COnstitution 44th Amendment Act, 1978, denuded the primacy of of the property right occupied in Part III relegating it kto be a 'statutory right' under Article 300-A which could be deprived of by authority of law. THe right to refund being the creature of the statute, could be taken by an Act of compentent Legislature. Article 38(2) of the Constitution enjoins the State to strive to minimise the inequalities of income amoungst the people.
24. Willoughby, on the Constitution of the United States, Volume I, at page 12, has adumbrated the doctrine of disclaimer of liability of the State to return the tax illegally collected thus;
'The general doctrine that no legal rights or obligations can accrue under an unconstitutional law is applied in civil as well as criminal cases. However, in the case of taxes levied and collected under a statute, later held to be unconstitutional the tax-payer cannot recover unless he protests the payment at the time made. THis is however a special doctrine applicable only to the taxes paid to the State.'
THis is also the view of the Austrialian High Court in Werrin v. THe Common-Wealth-59 C.L.R. 150. But this view was not approved in Kanhayalal's case (supra).
25. Any civilised system of law is bound to provide remedies for cases of what has been called unjust enrichment or unjust benefit, that is it prevent a man from retaining the money of, or some benefit derived from another, while it is against conscience that he should keep, as held by Lord Wright in Bibrosa v.Fairbrain-1974 A.C. 32.
26. The Parliament appears to have kept these factors in view and made :
(a) Structural alterations suitsably deploying non-abstendi clause excluding applicability of 'any other law'; despite non-exigibility of the goods or their exemptability but the duty paid, the claim for refund thereof is instisted under the Act alone laying emphasis on the adverb 'also'; sub-section (5) given exclusively to the Act 'save as otherwise provided by or under the Act'[sub-section (4)]; given special law of limitation [six months-sub-section (1)]; and machinery thereof through Section 11-B and brought it on Statute to have panoply ;
Reminded : (a) the assessee to be vigilant in the workinng of the Act to lay claim for refund within six months from the date of payment; and fondly hoped the he/it would restitute the refunded duty to thepayer; individual or bulk who preserved the evidience of purchase made from him/it and keep the residue unclaimed wind-fall as trustee for commonn goods, if not, exigible to excess profits tax, as held by American Courts. At the same time extending a warnning do not make it a game to getcollection of indirect tax accumulated even upto three years and then to launch litigation and be not a parasite in the society';
Attempted : (c) to quench the unsatiable crave for more of 'any person' turning him down after six months saying that : 'Look ! you over-stepped the nautical point, you are striped of your authority henceforth and thereby became a trespasser,sagiacity dictates you to roll up the net though managed to spread upto three years point ; close your widely opened mouth; be satisfied with the unclaimed fish thus far caught';
(d) Attempted to remove the benefit annd pernnicious effect on the (1) edific of justice and (2) society as a whole;
(e) Presumptive furnished to the Parliament that the Constitutional Courts (Supreme Court and High Court) had already adopted the prescription of the general law of limitationn as their base to grant the relief under Article 32 and 226 of the Constitution, enacted special law of limitation on the faith that these Court now too, respecting the will of the elected representatives of the people, may substitute it in the place of general law; as a part of the process precluded any court, to enter into this arenan since applicability of the Contract Act annd Limitation Act are already stood excluded resulting inn the exercise a surplasuge.
27. When so vast is the change in the situation brought about, so deep is its permeation and so farreaching are consequency animate to be flown from the amendment annd working of the Act. how is to articulate Section 11-B and given effect to, while exercising the power under Art. 226 of the Constitution, is the crux of the question claiming answer.
28. Reasonable construction of a statute; Southerland in 'Statutory Construction', Volumn II, Section 2219, at page 148 has stated that :
'Leberal presumption in favour of validity likewise applies to curative tax Acts as curative Acts are passed to save and effectuate irregular tax assessment s and collections.'
In Volume I, Section 1930 at pages 412-414, Southerland has stated that any material change in the language of the orginal Act is presumed to indicate a change in the legal rights. In interpreting an amendatory Act there is presumption of change in ligal rights. This is a rule peculiar to amendments and other Acts, purporting to change the existing statutory law.
29. It is already held that Section 11-B is a comlete Code in itself inclusive of special law of limitation. Therefore, what it its effect is to be considered.
30. Lord Esher M.R. in R. v Country Court Judge of Essa -1887 (18) Q.B.D. 704 held with reference to special remedies thus :
'Where the Legislature has passed a new staute giving a new remedy that remedy is the only one which can be pursued.'
31. In Barraclough v. Brown-1897 A.C. 615 at 622. Lord Waston held;
'The right and remedy are given uno flatu, and one cannot dissociate from the other. By these words the Legislature has, in my opinion, committed to the to the summary court exclusive jurisdiction, not merely to assess the amount of expenses to be repaid to the undertaker, but to determine by whom the amount is payable and has thereof, by plain implication enacted that no other court has any authority to entertain or decide these matters.'
32. Similar view of exclusion of the jurisdiction of the High Court with respect to the matters entrusted to special authorities was considered and unheld by the Court of Appeal in Horner v. Franklin- (1950) 1 K.B. 479 and Wilkinson v. Barking Corporation -(1948) 1 K.B. 721 and their Lordships of the Supreme Court in Firm Seth Radha Krishna v. The Administrator, Municipal Committee, Ludhiana- : 2SCR273 and Premier Automobiles v. K.S.Wadke- : (1975)IILLJ445SC . Bhagawati, J. In Kanwarlal Gupta v. Amar Nath Chawla- : 2SCR259 considering the necessity under Section 77 of the Representation of People Act to impose celling on election expenses and implied authority of agent to spend on behalf of the candiate held that the background of the need for Section 77 must inform the Court in the interpretation of this vital and signiflicant provisions in the election law of our country and this is the only reasonable in terpretationm of the provisions which would carry out its object and intendment and suppress the mischief and advances the remedy by purifying out election process and binding it of the pernicious and beneful influence ofbig money.
33. The scope of the validation of the amendment was considered and upheld by their Lordship of Supreme Court in Sri P. C. Mills v. Broach municipality : 79ITR136(SC) . Therein, Hidayatullah, C.J. speaking for the Constitutional Bench held thus :
'A Court's decision must always bind unless the conditions on which it is based are so fundamentally altered that the decision could not have given in the altered circumstances. Ordinarily, a Court holds a tax to be invalidly imposed because the power to tax is wanting or the statute or the rules or both are invalid or do not sufficienly create the jurisdiction. Validation of a tax so declared illegal may be done only if the grounds of illegality or invalidity are capable of being removed and are in fact removed and the tax thus made legal..... Something this is done by re-enacting retrospectively a valid and legal taxing provisions and then by fiction making the tax alredy collected to stand under the re-enacted law. Sometimes the legislature gives its own meaning and interpretation of the law under which the tax was collected and by legislative flat makes the new meaning binding upon courts. The legislature may follow any one method or all of them and while it does so it may neutralise the effect of the earlier decision of the Court which becomes ineffective after the change of the law ......'
In that case the Court on earlier occasion invalidated the law as to property tax. It was validated with retrospective effect. Its validity was again assailed but was upheld.
34. Lord Loyd of Hampstead in his 'Introduction to Jurisprudence', 4th Edition, at page 355, while euologising the sociological approach to law by Roscoe Pound that to provide fair share for all in the society, stated at page 357 thus :
'The Legislature is a vital factor in modern society in over-riding these (vested rights) to produce a fair balance and even the Courts can by enlightened decisions, unjust losses and distribute risks among those most able to bear them.'
35. Craies on 'Statute Law', 7th Edition at page 366 stated that 'the latest will of the Parliament should always prevail.'
36. Their Lordships of the Supreme Court, speaking through Sarakaria, J.in Commissioner of Sales Tax U.P. v. Parson Tools & Plants, Kanpur : 3SCR743 held that :
'The will of Legislatuare is the supreme law of the land and demands perfect obedience. Where the Legislature clearly declares its intent in the scheme and language of a statute, it is the duty of the Court to give effect to the same without scanning its wisdom of policy, and without engrafting adding or implying anything which is not congenial to or consistent with such expressed intent of the law-giver; more so if the statutes is a taxing statute.'
Therefore, let us how the Bombay Bench in Leukoplast case (supra) relied on by Sri Srinivasa Murthy has approached the problem. It istrue that the Divisionn Bench speaking through Gadgil, J. did take note of Section 11-B(5) but held at page 2010 thus :
'It would thus be clear that Section 11-B would not come in the way of the petitioner for claiming a refund, if sub-section (5) is omitted from consideration.
Having thus omitted, went on to consider thepre-existing interpretation given to Rule 11 of the Rules priorto the amendment by several Division Benches of that Court, viz. Associated Bearing Company Ltd. v. Union of India -1980 E.L.T. 415; Wipro Products Ltd. v. Union of India- 1981 E.L.T. 531, and laid down that the law thereunder would govern the case by omitting sub-section (5) of SEction 11-B and the Court, under Article 226 has power to grant refund. Sri K. Jagannadha Rao contended that the learned Judges instead ofconsidering the effect of Section 11-B omitted it and took shelter under the power of theCourt under Article 226 to grant refund relying on the pre-existing law, and that approach is not correct. We find considerable force in the contention.
37. In Bank of England v. Vagliano Brothers -1981 A.C. 107 (144), Lord Herschell held :
'I think the proper course is in the first instance to examine the language of the Statute and to ask what is its natural meaning uninfluenced by any consideration derived from the previous state of law, and not to start with enquiring how the previously stood, and the assuming that it was probably intended to leave it unaltered , to see if the words of the enactment will bear an interpretation in conformity with this view.
If a Statute, intended to embody in a Code a particular branch of the law is to be treated in this fashion, it appears to me that its utility willbe almost entirely destroyed and the very object with which it was enacted will be frustrated.'
38. In State of Rajasthan v. Leela : 1SCR276 , Raja Gopala Ayyangar, J. speaking on behlf of the Supreme Court, held at page 1299 thus :
'With due respect to the learned Judges, we do not find it possible to agree that it is permissible to omit or delete words from the operative part of an enactment, which have meaning and significance in thier normal connotation merely on the ground that according to the view of the Court it is inconsistent with the spirit underlying the enactment. Unless the words are unmeaning or absurd, it would not be in accord with any sound principle of construction to refuse to give effect to the provisions of a statute on the very elusive ground to give them their ordinary meaning leads to consequences which are not in accord with the notions of property or justice entertained by the Court......
We do not consider itpossible to reject word used in an enactment merely for the reason that they do not accord with the context in which they occour of with the purpose of the legislation as gathered from the preamable or long title......'
The above principle are our answer to Leukoplast. Thereby we find it , with respect incompatiable to have berth with the Division Bench decisions of the Bombay High Court and express our difficult to follow the same.
39. In view of the change in law, even the ratio in the decision relied on by the petitioners viz., Vazir Sultan Tobbaco Co. v. Union of India (supra), Kanara Rubber Product Pvt Ltd. v. Assistant Collector of Central Excise (supra) and Incheck Tyres Lte. v. Assistant Collector (supra) was knocked of their bottom rendering little assistance to the petitioner.
40. No doubt, Mr. Srinivasa Murthy placed reliance on a Division Bench decision of this Court in Kesoram Cements, Basantagar v. Union of India (supra). In taht case, the payment was made under protest, directly attacting the proviso to sub-section (1) of Section 11-B. Therefore the ratio laid down therein has no application to the facts in this case.
41. The result of the above discussion leads to the following conclusions. The Legislature is competent to alter the law declared by Courts by legislative flat giving new meaning by suitable structural alteration in the statute. There is liberal presumption of its validity, and change in the legal rights. THe Legislature is competent to creat rights prescribe procedure and limitation for enforcement. The will of the legislature is the supreme law and in must always prevail. IT is to be given effect to without scanning its wisdom or policy and without adding, omitting or implying anything inconsistent with the Statute. If a Statute intended to embody a particular branch of law, it is to be given effect to without whittling down its efficacy, lest it will be rustrated.
42. We have already noticed that the Legislature possessed no power to put fetters on the exercise of the power under Article 226 of the Constitution. Yet the Courts have adopted as a sound judicial principle the period of limitation prescribed under the Limitation Act to be the basis to grant refund of the money paid under mistake of law. THe period prescribed under Article 113 of the Limitation Act, 1963 is three years from the date of discovery of the mistake. Section 11-B (1) is a special law of limitation which prescribes limitation of six months from the date of payment of the duty. With this background, the quetion that emerges for consideration is what would be the approach of the Court in granting the relief of refund under the ACt? In the light of the discussion hereinbefore made, the inevitable conclusion is that the Court has to adopt the special law of limitation as an analogy to be the basis to grant relief under Article 226.
In this context yer another important factor to be kept inview is that the issue of writ of mandamus is a discretionary extraordinary powers conferred on this Court. There must be legal duty on the authority to obey the law and corresponding legal right to the party for enforcement.
43. In Suganmal v. State of M.P.-1965 (16) S.T.C. 398 their Lordship of the Supreme Court held that :
'Though the High Court have power to pass any appropriate order in the exercise of the power conferred under Article 226 of the Costitition, such a petition solely praying for the issue of a writ of mandamus direcdting the State to refund the money is not ordinarily maintainable.'
44. In that case sicne an alternative remedy of laying a suit in a civil Court was available, the writ petition for issue of a writ solely for the purpose of refund was held not maintainable. But in view of the change made in the statute excluding the jurisdiction of any Court, in appropriate cases, a writ of mandamus could be issued.
45. But the question still remains is whether refund could be ordered though the claim is barred by limitation, under Section 11-B(1) of the Act? In Burmah Construction Co. v. State of Orissa : AIR1962SC1320 it was held that the High Court cannot grant a higher relief than could be ordered by the original authority. That was a case where a writ of mandamus sought for the enforcement of the provisions of the statute and, in that context, since limitation is one of the criteria, their Lordships have held that the relief could not be granted when it was barred. In our view, Sri Srinivasa Murthy is justified in distingushing the ratio laid down therein and is of no held to the respondent.
46. Writ of mandamus, in form, is a command directing the State any authority, tribunal or a person requiring to carry out the duty specified by the Statute or to abstain from doing contrary to what was enjoined to be done. The authority under the Act is bound by thelaw in discharge of the duties enjoined in Section 11-B (5) read with Section 11-B (1) and they have to obey the law. In Narinder Chand v. U.T., Himachal Pradesh, : 1SCR940 it was held that no mandamus could be issued to refrain from enforcing a provisions of law. Sri Srinivisa Murthy contends that the issue of a mandamus is an innocuous prayer and it could begranted directing the authorities to refund the money. In this context it is of necessity to re-member that the trick of the pleadings or the comouflage of the relief sought for are not conclsive and the substance thereof is the criteria. A Division Bench of this Court to which one of us is a party (K. Ramaswamy, J.) in M.J.Shyamala Rao v. Radhakanthawamy Varu-1984-I A.P.L.J. 113 held thus :
'It is threfore, thefundction of the Court to unravel the trick of the pleading and the camouflage of the relief sought for under the garb of a plaint in a property constituted Court and to find out the root of the matter as to whether the relief sought for could adequately be determined and granted by the TRibunals constituted under the ACt.'
In that case, the quetion was whether the civil Court has jurisdiction to declare the title when the Estate (Abolition and Conversion into Ryotwari) Act conferred exclusive jurisdition on the Settlememt Officer to decide the issue of a ryotwari patta. The relief in the plaint was for declaration and injunction. It was contended that injunction cannot be granted by the Tribunal; therefore, the civil Court has jurisdiction. In taht context while dismissing the suit, the above law was laid down and held that the civil Court cannot grant declaration of title.
countinution of citation no. 1984-018-ELT -0732B-TRIB
47. The Court has to take note of the change of law and mould the relief in the light of the altered situation. If the mandamus is issued, relying on the interpretation of law preceding the amendment holding that the claim is within three years and refund could be ordered, then it would amount, not only compelling the authorities the disobey the law but also renders the amendment nugatory, trampling the law under the foot of power. In those circumstances, the sound exercise of discretion would be to dicline to grant the relief of refund for a period beyond six months prescribed under Ssection 11-B(1) of the Act. It may be made clear that the relief in an appropriate case, if it comes within the provisions of the Act but the autorities failed to discharge their duty, could be granted.
48. Considering from these prespectives, it must be held that the basis of all the authorities relied on has been altered depleting their binding nature. As a result, our aattempt to percdolate or cross over the NagarjunSagar Dam became insurmountable either way, comjpelling to accord our approval to replinuish the exchequer with the excess collection of the duty of excise to effectuate the Dieectives in Part IV of the Constitution, etc. It must thus be held that the petitioner has not made out any case for interference. Accordingly, we dismiss the writ petition, but in the circumstances, without costs.
49. After the dismissal of the writ petition yessterday, Mr. K. Srinivasa Murthy, learned counsel for the petitioner made a request to post the matter for arguments as regards leave the appeal to the Supreme Court. The matter is therefore posted to-day,
50. Mr. Srinivasa Murthy made an oral application under Article 134-A of the Constitution seeking leave to appeal to the Supreme Court.
51. Mainly we have treked on and our conclusions have been stemmed from the decisions of the highest Court of the land referred to in our judgment. Our zone of consideration is, thereby, one of applicaton of the law laid down by the Supreme Court. Article 133(1) of the Constitution postulates that where the High Court is of the opinion that the case involves a substantial question of law of general importance which in its opinion needs to be dicided by the Supreme Court, a certificate may be granted.
52. Mr. Srinivasa Murthy relied upon a decision of the Supreme Court in the State Bank Of India v. N. Sundara Money : (1976)ILLJ478SC and stated that in view of the difference of opinion of this Court and that of the Bombay High Court, leave may be granted. In distingushing the decision of the Bombay High Court, we have followed the law laid down by their Lordships of the Supreme Court in State of Rajasthan v. Leela (supra) and that of the House of Lords in Bank of England v. Vagliano Brothers (supra) thereb we expressed our inability to follow the law laid down in the decision of the Bombay High Court.
53. In the circumstances, we are of the opinion that this case does not involve any substantial question of law of general importance which in our opinion needs to be decided by the Supreme Court.
The oral application for leave is therefore, rejected.